Should you manage your own investments or work with an advisor? When should you do Roth conversions? Does having multiple IRAs make you diversified? These are all great questions we’ve received from listeners, and we’ll answer them on today’s show.
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On today’s episode, we’re answering listener’s questions about finances and retirement. Let’s jump into the questions.
Clients often ask: “Should we be doing our Roth conversion right now?”
We get this question a lot during strategy meetings with clients, so we thought we’d answer it here.
Every year we review tax strategies with our clients, and many clients want to know if they should be doing Roth conversions.
A Roth conversion is taking money out of a traditional IRA or 401k and putting it into a Roth IRA. Be very aware, when you do a Roth conversion, you have to pay tax on that money today. Once you get it into the Roth bucket, it then grows tax-free.
When we do Roth conversions, we don’t do them all at once. We are very strategic about it. You want to maximize your tax bracket.
Tom asks: “I have an MBA and I understand investments well, so I’ve always handled my portfolio myself instead of having any professional help, and I’ve always done well. In your honest opinion, is there really any reason for me to work with an advisor?”
This is a great question. Ask yourself: What are your needs, and what can an advisor provide? If you think all an advisor does is investments, we can see why you might hesitate to get one.
What we do is holistic planning and wealth management. We do income planning, looking at current and future sources of income and more.
Listen to the full podcast or use the timestamps below to jump to a specific section.
[1:52] – Market Watch article
[7:01] – Roth conversions
[13:50] – Financial advisors
[26:24] – Roth 401k
[30:28] – Diversification
Thanks for checking out this episode. We’ll talk to you again soon.
“Be very aware, when you do a Roth conversion, you have to pay tax on that money today.”